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This year was supposed to be a year of rising bond yields as the Fed’s tapering of “QE Infinity” gathered steam. Most Wall Street analysts expected the 10-year Treasury to be closing in on 4% by now.

Instead, the 3% hit in early January has proven to be the high-water mark, and the yield has spent most of the first half of 2014 bouncing in a range of 2.5%-2.8%. Sagging bond yields have made dividend stocks look fantastic by comparison, and 2014 has been a strong year for virtually anything paying income.

“Bond like” triple-net REITs have done particularly well. Realty Income (O) and National Retail Properties (NNN) are up 19% and 22% year to date, respectively. Mortgage REITs — one the sectors most sensitive to yield movements — also have had a fantastic first half to the year. The iShares Mortgage REIT ETF (REM) is up 11% year-to-date, not including its gargantuan 15% dividend yield.

Looking more broadly, the iShares Select Dividend ETF (DVY), which focuses on high-dividend stocks, is up 10% YTD, easily beating the 7% return on the S&P 500.

Where do we go from here?

Looking at Janet Yellen’s most recent Fed statement, I expect income-paying sectors to continue their outperformance. The Fed will keep rates low well into 2015, though it indicated a slightly more aggressive tentative schedule for later in 2015 and in 2016. The median Fed forecast for the Fed Funds rate was 2.5% by the end of 2016, up from the 2.25% forecast indicated at the last meeting.

But far more interesting for investors in dividend stocks, however, was that Yellen & Co. lowered their forecast for the long-term Fed funds rate from 4% to 3.75% due to the recovery being a little more sluggish than hoped. The Fed now expects GDP to grow at 2.1% to 2.3% this year rather than at 2.9%.

Sluggish growth is not necessarily all bad for U.S. stocks, as it has forced them to be more disciplined with their capital. With data in from the first quarter, U.S. share repurchases and dividend payments are at a new all-time high. Members of the S&P 500 returned $241 billion to shareholders last quarter in combined dividends and repurchases, surpassing the old pre-crisis 2007 high of $233 billion.

Eventually, I’d like to see more robust top-line sales growth … but for now, I’ll gladly accept higher dividend checks.

Bottom line

The Fed won’t be raising short-term rates for another nine to 12 months at the earliest, and the low forecast for long-term rates, should it prove to be accurate, will make dividend-paying stocks attractive for income investors.

My recommendation? Continue to accumulate shares of high-quality dividend stocks on any pullbacks. I expect the 10-year Treasury yield to fluctuate in a relatively tight range of 2.5% to 2.9%. Any selloff of income securities as yields reach the upper bound of this range should be viewed as a buying opportunity.

Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he was long DVY, O and NNN. Click here to receive his FREE weekly e-letter covering top market insights, trends, and the best stocks and ETFs to profit from today’s best global value plays.